Imagine selling your site for $200,000. Wouldn’t that be incredible? It depends actually. What if the site took you four years to build? Each week you spent over 70 hours writing content and getting the word out. Furthermore, this was your only job during this time period.

You’re 29 now and flush with $150,000 in cash after taxes, that is, if your buyer pays up front and your company doesn’t have any debt obligations to pay before finalizing the deal. What now? Are you going to start all over and try and build a new website? Are you going to get a job? $150,000 is not going to last you very long if you don’t do anything given interest rates are at such pitiful levels.

What if you were a freelance writer who made $3,000-$5,000 a month. Naturally, you write a book about how to make money freelancing to generate an extra income. Now you’re rocking $3,500-$5,500, or $42,000 – $66,000 a year. Right on! This is your full-time job now and all is good. But, is $42,000-$66,000 really that impressive when college graduates several years out regularly make the same amount? Maybe not. Furthermore, it’s hard to scale freelancing. If you don’t work, you don’t get paid!

WHY DO WE SET DIFFERENT STANDARDS ONLINE vs. OFFLINE?

If I made $50,000 a year for the next four year, nobody would care. The per capita GDP in the US is $49,000 a year. Meanwhile, the per capita GDP in Luxembourg is $90,000 a year! 29 year old MBAs who graduate from Berkeley make $125,000 – $150,000 their first full year out. They are at the higher end of the spectrum, but they are nobody special nor do anybody treat them special.

But if you sell your website for $200,000 after four years or make $5,000 a month freelancing, people come out in droves to listen to your story! You instantly turn into a mini-celebrity online. And if you can teach people how you did it, you will probably make even more money.

So I ask myself, why do we set different standards for online and offline income? Is it because working for a company is so bad that we must deserve an enormous premium? There are plenty of benefits of working for a company, namely: a steady paycheck, health insurance, vacation pay, and retirement programs. Even better if you somewhat like your day job!

Perhaps people think that being an entrepreneur is easy. I can assure you, it’s not the case. What does feel fantastic is seeing a tremendous correlation with effort and reward. Entrepreneurs eat what they kill, and to most, they wouldn’t have it any other way. If you are complaining at your job why you aren’t getting promoted and not getting the raise you deserve, try your hand at entrepreneurship and do a little suffering. It’ll be good for you!

When I first graduated from college, my goal was to make $100,000 before I retire. After several years of work, I then made it a new goal to make $1 million a year before I retire. Sure, I failed at making $1 million a year from my day job, but it was a stretch goal that helped me earn more than if I did not have this goal!

When I started Financial Samurai, my goal was to just have fun! A year later, I set a goal to make $1,000 a month. Three years later, my goal is now to make $200,000 a year working 20 hours a week. That’s a pretty good goal given $200,000 is the ideal income for maximum happiness, especially if one can only work 3-4 hours a day. However, why am I only shooting for $200,000 a year when I shot for five times that for my day job?!

ENEMY OR FRIEND

We are constantly limiting our potential through our own limiting beliefs. Have you heard these excuses before?

“I don’t think I’m smart enough.”

“The idea has already been done.”

“What if everybody thinks I’m stupid?”

“What if everybody hates me?”

“What if I fail?”

“I’m going to be so embarrassed if this doesn’t work out.”

“I don’t deserve to be here.”

Before we even start, we are already planning for failure! We’ve become accustomed to the fact that only a few people can make enormous sums of money online. Yet, there are billions of dollars to be had!

It’s hard to push through during the beginning, but if you last long enough, the chances of being rewarded skyrocket. The 5,000 words a week Yakezie Challenge is one such step towards blogging glory. There are many more Challenges I push myself to complete every single week.

The Internet is the biggest meritocracy on the planet. Practically anybody with internet access can start their own website or company in a day. Everybody with enough resolve can publish good content or come up with a product. The issue is, we think too small.

It’s time we reprogrammed our minds and think bigger online. Selling your site for $200,000 is fantastic. But even if you made a healthy 10% a year off your gross proceeds, that’s only $20,000 a year. Making $5,000 a month freelancing is good.But these figures are downright pedestrian offline if we plan to work full-time online.

Readers, why do you think we have different standards online vs. offline? Is it all about the transition from part-time online to full-time online that gets everybody all excited?

Financial Samurai is the founder of the Yakezie Network. Through continuing education and hard work, Sam believes everyone is able to achieve financial independence and give back to the community with abundance. Together we'll slice through money's mysteries!

It seems almost dumb that I never thought of it like this before! There are different standards for online and offline income — I guess it’s because people are still mentally ‘behind the times’ and don’t think that internet businesses are “legitimate.” Because you know, “Grandpa Bob worked 60 hour weeks and made $50K/yr at the firm, that’s legitimate hard work right there, son, you should be doing that.” I think people really might still see internet business in the same way that they see kids playing video games. Not legit and a waste of time! So maybe with more time people will see internet profit as legit and start expecting an income that’s the same as regular day-job income.

I think you’re right. There will need to be a whole new generational change to change the way we thinking about online income. We are certainly heading there, which is why I’m bullish about online businesses over the next 30 years.

Think about how we will accept our genre over the next 30 years when our kids decide to give it a try? No problem son! Go for i!

I think when it’s up to your own devices to bring in a decent sum of money and not depend on a traditional income, we settle for a lower amount thinking, “Hey, that’s great! I did it myself.” Whereas with a traditional career there are income norms that we feel we must make and that we use a guideline to feel successful. There are no real income guidelines for starting your own business, online or off.

Then I think we think too little of our own capabilities! Someone, somewhere first started the company you worked for. If we believe we can do it, we have a higher chance of succeeding than if we don’t!

Great question Sam. I think earning a living online still feels unconventional. A basic wage by unconventional means would feel more rewarding then a basic wage by basic means, therefore people feel more satisfaction with a lower online salary. Good luck with your stretch goals.

I think I happily make less money online because I have traded money for freedom. I can work when it is convenient, and I don’t have to pay to put my two youngest children in day care. I don’t have to go to endless meetings, and I don’t have to deal with office politics. However, I also have negative thoughts as you mention that can be limiting, so it is time to put those aside and make more money online because freelancing is my career now.

I can relate, b/c I’ve done the exact same thing. I’ve got tons more freedom now, but lots less money! Oops! But, that doesn’t mean I’m not aiming to boost my income again b/c I believe I can do it, and so should everybody else who would like to earn more from their online endeavors.

For me – the reason the goals are A LOT smaller is because it is a hobby that has turned into a very real income stream. It wasn’t started as “business” so it doesn’t feel like I have to hold myself out to a higher standard. The moment it becomes that I think is the moment it will no longer be fun for me.

I thought the same way too, until I retired from the corporate world this year. I was afraid blogging would stop being fun once making money had to be incorporated. You know, writing the most boring ass credit card and XYZ product review posts you’ve ever read to to earn money.

I hear you existentially, Sam. But in my case it is not my beliefs that are limiting (I believe :)). It is just that it becomes too much pressure and very soon I’ll have to make a choice where to put what part of my effort. Also, it is a matter of knowledge – I still don’t know much about on-line entrepreneurship and this is what I’ll be learning from now on.

I personally have different standards online because it’s not about the money. To me $50k + freedom + enjoyment + power over my own life is worth $200k working for someone else. I totally agree with you that we should aim higher though – money is just a byproduct of the value we add and online we can add lots of value.

I’m not sure we can entirely say with certainty that “it’s not about the money.” There definitely as a monetary aspect to writing, freelancing, blogging, just various degrees of thinking. We’re all at different monetary stages as well.

I make more online and with passive income than my mom at her full time jobs. Yet she always keeps asking if I am going to look for a job someday and if I need money. For many, online money is not honest money, so you can’t aim high or you’d look greedy. For others it is about doing what they like and not imagining one second that someone would pay them for it. I like to aim high and maybe make only 25% of the goal instead of setting a low goal.

I had the same thought a while back, and that is why I concluded that my goal is to make $20,000 per month. If I do that, then I will work online only. That is stretch enough to be a fun challenge, and if it happens consistently for a year, I’ll seriously consider just doing this full-time, and not working an offline job. I don’t think there really has to be a disconnect between online and offline.

The only exception would be lifestyle living. If I wanted to move to Costa Rica and work from a laptop, I could make much much less and be very happy. I choose to be in California though.

$20,000 a month would be nice online for sure. Why not stretch for that indeed, especially if you’re making that at your day job. I couldn’t really imagine that happening two years ago, but I believe now. Just have to focus on getting there, without losing balance in the process.

Good point. I should write about the various stages of online income, given I went through that stage for around 30 months before taking the leap. The leap is much less scary if you can earn enough to cover your basic living expenses at least.

Our culture idolizes individualism. A person who has an MBA is seen as just another suit. There are people out there who play video games and record them on Youtube making over $100k per year. These people are internet legends, but are they adding anything of value?

Perhaps you are right about the individualism, entrepreneurialism aspect of the North American culture. Building something with your own two hands is much more impressive than just joining a company I guess.

I think that the reason people get excited over a $200,000 sale of a website is because it is all at once. Sure it happened over 4 years and works out to an average of “only” $50,000 (only! That’s double what I made this year) per year. But it was a lump sum. How many people can say that they woke up one morning with almost a quarter million more in the bank than they had the day before?

There’s also the issue that you were making money leading up to the sale. If you made $200,000 leading up to selling for $200,000, then you are averaging a 6 figure salary over those 4 years. That’s not bad for something that doesn’t require having that Berkley MBA.

Thinking big is great, but you also need specifics. How will you earn that money? Writing great content and marketing is all well and good, but rarely enough. I think one needs a niche and a strategy, something distinct to offer.

You are so very correct ! In fact the other thing that I am amazed at is that when we work in IM in the online world everyone wants the profits to be 100%. Whereas in the non-IM world if you open a business nobody would expect (myself included) 100% profit margin.
In the real world if your business makes a 10% net profit you are successful whereas in the online world it is assumed that 100% is the profit margin.

Frankly that mentality is putting a block in your capabilities, imagine if you were able to invest in say two extra writers and paid them and still made about even 50% profit margins, the results would be huge. I would say massive and that challenge of 50000 words would be over in a jiffy. However the mentality is that we do it all ourselves and that challenge is a tough one !

I think it’s primarily due to the fact that most of us see our sites as a hobby that we started for fun. It takes awhile to really get into the business mindset and realize you should run (and sell) it as such.

I have to agree somewhat with JT_McGee above. Often time, I set a “minimum” goal of what I need to make to get by. This may be what I could make if I worked a job. The beauty of being an entrepreneur is that you have the opportunity to make far more than a set amount…and this is probably the allure for most of us. If I can make $40,000 a year at my job and get a 3% raise each year after that, my income goes up pretty slowly. But if working for myself, I can eek out $30,000 this year, there is a very real possibility that I can make $100k next year and $300k the year after that.

I think it has something to do with the virtual world. Is it stealing if you download a song or movie and don’t pay for it? An online business does not take the investment a rick and mortar business requires. Could that influence the thinking?

I think it’s viewed differently because it’s harder to do online. Any idiot can get a corporate job making $50,000/yr…very few people can make that same money with their online business.

It was the same situation back before online poker got shut down in the US…if you made 40-50k playing online poker you would have hundreds of people willing to pay to learn from you even though its a rather pedestrian sum of money in “real” job terms.

Would love to read your poker insights if you have some! I used to play all the time. We have this VC/internet hidden poker game once a week in SF which is a whole lot of fun. A couple mid-level Googlers join too :)

@Kathleen, @Jason – You are right. If you are not having fun, I don’t think you are doing it right! Keeping the fun aspect is so important online and with practically everything we do entrepreneurial wise. It helps keep us coming back for more!

Everyone’s situation is different. Most, like myself got into blogging with no real direction or for fun. Today, I’m happy earning a side income, but that’s all I maybe want. I dislike putting all my eggs in one basket, and as much as I appreciate those who take the leap (like yourself), it’s certainly not for everybody. I’ve yet to decide whether it’s for me or not, but then again as someone who currently has 4 income sources, I’m ok with what I have.

I think there will be a huge fall off of bloggers at some point when the advertising well dries up. Because, let’s face it, online income earning as it stands today won’t stay like this forever, especially with the constraints that are put on by G every couple of months.

It’s not easy trying to make a living online or doing anything entrepreneurial for that matter. And earning $20, $200, $2000 takes so much more time and work when you’re doing everything on your own versus working for someone else. We also all have different goals with what we’re trying to do online too so $200 could be a huge accomplishment for one blogger, and inconsequential for another. I believe that everything counts though!

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